Stock Market News

Wednesday preview: Sainsbury issues third quarter update

J. Sainsbury is expected to report a mixed third quarter trading update on Wednesday, according to Jefferies International.

The broker estimates the UK supermarket may post a 1% fall in like-for-like sales, which would represent a sharp slowdown to the 1.4% growth reported in the first half.

"This would confirm both a tough trading backdrop and a weakening relative outperformance by the group," Jefferies said in a note issued last week.

"We have noted a step up in Sainsbury's gross margin action in recent weeks, but expect more constructive developments in cashflow/space dynamics to emerge as a more pondered reaction to industry challenges."

Jefferies recommended a 'hold' rating and target price of 410p ahead of the group's update tomorrow.

Rival supermarket Asda on Monday said it enjoyed a strong performance over the Christmas period online and in store ahead of its fourth quarter results in February.

On tomorrow's agenda, other companies reporting including Domino's Pizza, Galliford Try and Persimmon.

Afterwards will be the release of economic data including the Eurozone unemployment rate, German factory orders, US mortgage applications and US employment data.

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